UK Life, Driving value through excellence

Investor and Analyst Event, Wednesday 6th May 2009

Andrew Moss NUL18.11.08

 Disclaimer

This presentation may include oral and written “forward-looking statements” with respect to certain
of Aviva’s plans and its current goals and expectations relating to its future financial condition,
performance and results. These forward-looking statements sometimes use words such as
‘anticipate’, ‘target’, ‘expect’, ‘estimate’, ‘intend’, ‘plan’, ‘goal’, ‘believe’ or other words of similar
meaning. By their nature, all forward-looking statements involve risk and uncertainty because they
relate to future events and circumstances which may be beyond Aviva’s control, including, among
other things, UK domestic and global economic and business conditions, market-related risks such
as fluctuations in interest rates and exchange rates, the policies and actions of regulatory
authorities, the impact of competition, the possible effects of inflation or deflation, the timing impact
and other uncertainties relating to acquisitions by the Aviva Group and relating to other future
acquisitions or combinations within relevant industries, the impact of tax and other legislation and
regulations in the jurisdictions in which Aviva and its affiliates operate, as well as the other risks
and uncertainties set forth in our 2008 Annual Report to Shareholders. As a result, Aviva’s actual
future financial condition, performance and results may differ materially from the plans, goals and
expectations set forth in Aviva’s forward-looking statements, and persons receiving this
presentation should not place undue reliance on forward-looking statements.

Aviva undertakes no obligation to update the forward-looking statements made in this presentation
or any other forward-looking statements we may make. Forward-looking statements made in this
presentation are current only as of the date on which such statements are made.

Andrew Moss NUL18.11.08

Today

• UK Life is in excellent shape

• Delivering a consistent and compelling strategy

• Transforming the business to a modern, low cost and dynamic organisation

• Delivering previous promises

• Well positioned for growth, profit and value

• Clear plans and priorities for the future

UK Life, well positioned to drive further value

3
Agenda

• UK Life in excellent shape Mark Hodges, Chief Executive Officer

• Driving up profitability & generating capital John Lister, Finance Director

• Delivering operational excellence Toby Strauss, Chief Operating Officer

• Break and innovation demonstrations UK Life Management Team

• Strategic outlook Mark Hodges, Chief Executive Officer

• Strategic focus David Barral, Marketing Director

Questions & answers

Lunch

4
An experienced and proven team

Mark Hodges
Ian Butterworth Chief Executive Officer Rita Agati
Chief Information Officer HR Director

David Barral John Lister

Marketing Director Finance Director

Angela Seymour Jackson

Toby Strauss Distribution Director, Graham Boffey
Chief Operating Officer Intermediaries & Partners Distribution Director, Corporate & Consumer 5
 UK Life within Aviva

Life New Business Sales IFRS Life Operating Profit

UK Life UK Life
33% 33%

Rest of Group Rest of Group

67% 67%

MCEV Life Operating Profit Embedded Value

UK Life UK Life
32% 35%

Rest of Group Rest of Group

68% 65%

On all measures, UK Life is a key component of the Group result

Source: 2008 data for new business sales (PVNBP), IFRS and MCEV operating profit and 31 December 2008 life and related business embedded value. 6
One Aviva

Purpose UK Life
Prosperity &
peace of mind
Market leadership
Vision
One Aviva, Drive up profitability
twice the value

Strategic Targets
Generate capital
priorities Operational excellence
• Manage composite • 98% meet or beat COR
portfolio • £500m cost savings by
Competitive advantage
• Build global Asset 2010
Management • Double IFRS EPS by
• Allocate capital 2012 at the latest
rigorously • 1.5 – 2 x dividend cover
• Increase customer on IFRS post tax
reach operating earnings
• Boost productivity

Aviva Investors
• Globally integrated business • Transform the investment model • Increase third party business

UK Europe N. America Asia Pacific

Market leadership Scale, growth, capital • Optimise business Scale, growth
• Address legacy • Seize unique growth mix, growth & margin • Prioritised portfolio
• Transform business opportunities • Generate net capital • Regional operating
model • Leverage scale returns model
• Exploit UK synergies • Generate capital • Contribute to doubling • Investment required
• Generate capital IFRS EPS by 2012

UK Life, fundamental to delivering One Aviva, twice the value

7
Agenda

• UK Life in excellent shape Mark Hodges, Chief Executive Officer

• Driving up profitability & generating capital John Lister, Finance Director

• Delivering operational excellence Toby Strauss, Chief Operating Officer

• Break and innovation demonstrations UK Life Management Team

• Strategic outlook Mark Hodges, Chief Executive Officer

• Strategic focus David Barral, Marketing Director

Questions & answers

Lunch

8
 Driving up profitability

2005 2008 +/-

Life & Pensions sales (PVNBP)1 £9,185m £11,669m +27%

Life & Pensions margin1,2 2.9% 3.5% +60bp

Cost overrun £140m £40m 71%

New business IRR 10.6% 14.0% +340bp

Existing Business operating return £372m £679m +83%

EV operating profit £589m £883m +50%

IFRS operating profit £382m £751m +97%

Significant progress on delivering the One Aviva, twice the value agenda
2005 shown on an EEV basis, 2008 on a MCEV basis. 1Data shown on an EEV basis. 2Margin pre cost of capital and taxation, 2008 margin unaudited, published MCEV margin 1.7%. 9
 Widening the income and expense ‘jaws’

Life & Pensions Sales and Operating Expenses

35%

L&P Sales
25%
• Increasing sales while growing
margin
15%

• Targeted cost reductions,

5% driving out inefficiencies and
Growth reducing operating expenses
2005 2006 2007 2008 2009
-5%

• Lower, more flexible and

-15% variable cost base
Operating
Expenses

-25%

Expense over-run eliminated in 2009

Life & Pension sales calculated on an EEV basis for comparative basis. 10
 Driving up profitability

2005 2008 +/-

Life & Pensions sales (PVNBP)1 £9,185m £11,669m +27%

Life & Pensions margin1,2 2.9% 3.5% +60bp

Cost overrun £140m £40m 71%

New business IRR 10.6% 14.0% +340bp

Existing Business operating return £372m £679m +83%

EV operating profit £589m £883m +50%

IFRS operating profit £382m £751m +97%

Significant progress on delivering the One Aviva, twice the value agenda
2005 shown on an EEV basis, 2008 on a MCEV basis. 1Data shown on an EEV basis. 2Margin pre cost of capital and taxation, 2008 margin unaudited, published MCEV margin 1.7%. 11
 Generating capital

2005 2008 +/-

New business capital strain(1) £488m £293m -40%

Strain % of L&P sales (PVNBP)(2) 5.3% 2.5% -2.8pps

Free surplus generation £365m £704m +93%

£500m dividend paid over the last three years

Delivering value to group

(1) New business strain includes initial capital strain and changes in required capital. (2) Life & Pensions sales calculated on an EEV basis for comparative basis. 12
 Delivering operational excellence

2005 2009 Q1 +/-

UK headcount 12,500 9,200 -26%

Policies per headcount 1,032 1,485 +44%

Core admin systems 20 4 -80%

Value on scale platforms 60% 75% +15pps

Distributor service rating 1 star 4 star +3

Customer recommendation score 38% 68% +30pps

Employee morale score 49% 68% +19pps

We have transformed our operating model

13
We have delivered our promises

• Rationalise costs
9 • Develop the business 9
• Simplify the legacy 9 • Strong balance sheet 9
• Value out of service
9 • Capital efficiency 9
• Manage retention
9

UK Life is in excellent shape

14
Hot topics

Trading through the

Commercial mortgages
recession

Re-attribution of the
Brand re-launch
inherited estate

15
 Trading through the recession – our progress

Quarterly Sales Quarterly Market Share

PVNBP £m %
3,500 15%
3,000 14%
2,500 13%
2,000 12%
1,500 11%
1,000 10%
500 9%
0 8%
Q1 08 Q2 08 Q3 08 Q4 08 Q1 09 Q1 08 Q2 08 Q3 08 Q4 08
Pension Bonds & other Annuities Protection

• Sales slow but within forecast

• Market share increase at higher margin
• Q1 net outflow only £0.1bn (excluding expected endowment maturities)
• No unusual lapse experience

Thriving in challenging markets

Quarterly sales (PVNBP) calculated on an MCEV basis. Market share based on ABI data. 16
Trading through the recession – our focus

• Holding tight financial discipline for value

– Rigorous hurdle rates – e.g. bulk purchase annuities
– Re-pricing – group personal pensions, protection and annuities
– Commission reduction – bonds and pensions
– Withdraw unprofitable products – Inflation Protected Guarantee bond

• Benefit from ongoing innovation through 2009

– Customer portal
– Adviser portal
– Pensions tracker
– Customer data e.g. Protection postcode rating

Focus on profitable growth

17
Commercial mortgage portfolio

Commercial Mortgage Portfolio Growth 1992-2008

£bn £bn
12 20

18
10
16

14
8
12

6 10

8
4
6
4
2
2

0 0
1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

Commercial UK NHS Healthcare Annuity Book (RH Scale)

• Portfolio developed to support profitable growth in our annuity business

• Producing higher yielding fixed rate assets (average 164bps above gilts since 2000)

A portfolio to support profitable growth in our annuity business

18
 A high quality portfolio

31 Mar 2009
Portfolio Data 31 Mar 2009
Number of borrowers 536
Number of properties 3,473
Total UK Remaining UK Commercial
commercial loans Number of tenants 6,110
commercial property
£8.6bn
mortgage portfolio Annual interest income £650m
portfolio £8.9bn
£11.4bn Annual rental income £857m
Average lease term 12.5 yrs
Gov’t Tenants
£0.3bn Average remaining loan term 15 yrs

NHS
Healthcare £2.5bn

• No high risk lending such as interest only loans with high LTVs

• All loans secured by first charge on properties

• Strong matching of lease terms to remaining loan terms

• Business written with experienced property professionals with strong track records

Cautiously constructed portfolio

19
 A well constructed and highly diversified portfolio

Portfolio by Sector Portfolio by Region

(compared to industry benchmark) (compared to industry benchmark)
60% 60%

50%
50% 47% 50%

40% 40% 37%

35%

% of Portfolio
% of Portfolio

30% 30% 26%

24% 25%
21% 22%

20% 20%
15% 14% 15%
12%
10%
8% 10% 8%
10% 6% 6% 6%
5%
3% 3% 2%
0% 0%
Industrial Leisure Office Other Retail London East Anglia Midlands South North Scotland Wales

UK Life Benchmark

• Underweight in the office sector (most volatile) and slightly overweight in retail (less volatile)
• Underweight in London (most volatile) when compared to the IPD Commercial Property Universe
• c6,500 commercial tenants, our biggest with a 5% share and 10 others with around 1%

Portfolio well diversified geographically, by sector, borrower and tenant

UK commercial property loans portfolio as at 31 March 2009 20
Portfolio developed on sound lending principles

30 Dec 30 Jun 31 Dec 31 Mar

2007 2008 2008 2009
Interest service cover 1.29 1.28 1.30 1.31
Average loan to value 76% 81% 103% 105%
Vacancy rates 3.8% 3.7% 4.1% 4.8%
Interest arrears £0.1m £0.1m £0.2m £2.2m
Interest arrears 0.01% 0.01% 0.02% 0.25%

• Primary focus on income quality and longevity to support loan service and debt reduction
• Strong loan and interest service cover
• Minimal interest arrears at ¼ of 1 per cent of annual interest
• Provisions of c£700m established (c7.9% of commercial property loans)

Strong interest service cover, low vacancy rates and interest arrears
21
Commercial mortgages summary

• Developed to support annuity business

• Well constructed and diversified portfolio

• Strong loan and interest service cover

• Primarily long-term with limited short term maturities

• Minimal arrears

• Provisions of c£700m established (c7.9% of commercial property loans)

• Proven and effective loss mitigation process

• No new defaults year-to-date

A high quality commercial mortgage portfolio

22
 Inherited estate reattribution – customer perspective

• Strong customer story – 1million customers benefit

• Policyholder Advocate supportive

• Incentive payment of £400m(1) that increase with the value of estate

• Average payment per electing customer of £500(1) (minimum of £200)

• 1st June election commences

- Individual choice
- No majority vote

• 1st October effective date

A deal that flexes the incentive payment to the size of the estate
(1) 23
Based on estate value of £1.2bn and 80% take-up
Inherited estate reattribution – shareholder perspective

• New deal reduces incentive payment, flexes with size of estate

– Revalued at the average of 1 June, 1 July and 1 August

• Plans in place to offset IGD impact in 2009

– Payment in Q4
– UK Life actions to contribute a further £200m

• Policyholder incentive payment acquires:

– Assets backing the estate (£1.5bn at 31.12.08)*
– Assets and Liabilities backing the cost of guarantees (£3bn at 31.12.08)*

* Based on 100% policyholder take-up

A good deal for shareholders

24
Inherited estate reattribution – shareholder perspective

• Significant capital and earnings benefits:

– Provides £600m of new business capital strain funded from reattributed
estate in first 5 years
– 3 year cash payback
– One off £156 million MCEV profit
– One off £58 million IFRS profit
– Ongoing IFRS profit c£50m per annum

Significant capital and return benefits

25
 Inherited estate reattribution – shareholder perspective

Significant potential upside:

• Post reattribution lapse increase of 1% would increase IFRS and MCEV results by
£20m
• 1% decrease in equity volatility would increase IFRS and MCEV results by £15m
• 1% recovery in property values would increase IFRS and MCEV results by £8m
• 50bps narrowing of credit spreads would increase IFRS and MCEV results by £16m

A good deal for shareholders with significant upside potential

26
Maximising the re-brand opportunity

• Aviva from 1st June

• Awareness of name change 76%
• Consideration trebled to 32% in just 3
months
• World’s 4th most valuable insurance brand
(c$6.1bn, Brand Finance global 500 report
April 2009)
• Individual recognition at core

Intensive activity provides a real opportunity to re-position UK Life

27
Agenda

• UK Life in excellent shape Mark Hodges, Chief Executive Officer

• Driving up profitability & generating capital John Lister, Finance Director

• Delivering operational excellence Toby Strauss, Chief Operating Officer

• Break and innovation demonstrations UK Life Management Team

• Strategic outlook Mark Hodges, Chief Executive Officer

• Strategic focus David Barral, Marketing Director

Questions & answers

Lunch

28
 UK Life, Driving Value Through Excellence

• Improve quality of earnings

UK Life
• Grow market position
Market leadership
• Reshape business mix
Purpose
Drive up profitability • Drive margin and IRR
Prosperity &
peace of mind
Generate capital improvements
Vision
One Aviva,
twice the
Operational excellence
value

Strategic
priorities
Targets Competitive advantage • Reduce new business strain
• Manage composite • 98% meet or beat COR
portfolio • £500m cost savings by
•

•
Build global Asset
Management
Allocate capital
•
2010
Double IFRS EPS by
2012 at the latest
• Greater value from large back book
rigorously • 1.5 – 2 x dividend cover
• Increase customer on IFRS post tax
reach operating earnings
• Boost productivity

Aviva Investors
• Globally integrated business • Transform the investment model • Increase third party business

UK Europe N. America Asia Pacific

Market leadership Scale, growth, capital • Optimise business mix, Scale, growth
• Address legacy • Seize unique growth growth & margin • Prioritised portfolio
• Transform business opportunities • Generate net capital • Regional operating
model • Leverage scale returns model
• Exploit UK synergies • Generate capital • Contribute to doubling • Investment required
• Generate capital IFRS EPS by 2012

Drive up profitability
29
 Driving up profitability

2005 2008 +/-

Life & Pensions sales (PVNBP)1 £9,185m £11,669m +27%

Life & Pensions margin1,2 2.9% 3.5% +60bp

Cost overrun £140m £40m 71%

New business IRR 10.6% 14.0% +340bp

Existing Business operating return £372m £679m +83%

EV operating profit £589m £883m +50%

IFRS operating profit £382m £751m +97%

Significant progress on delivering the One Aviva, twice the value agenda

2005 shown on an EEV basis, 2008 on a MCEV basis. 1Data shown on an EEV basis. 2Margin pre cost of capital and taxation, 2008 margin unaudited, published MCEV margin 1.7%. 30
 Sustaining our market share….

Market Share 2008 • 11.3% overall L&P market share in 2008

benefiting from:
18 – Launch of Simplified Life proposition in
16
2006
14 – Income Drawdown launch 2007
12
Overall market share – Flight to quality Q3/Q4 2008
(1)

10
Market share

– Growth in bulk purchase annuity

8
business with 39 schemes won in
6 2008
4
14% 16% 10% 9%
2
• Top 3 ranking in all L&P product lines
0
Annuities Protection Pension Bonds

Richer mix and overweight in risk business

(1) Excluding all BPAs: Aviva UK Life share of BPA market 9%, Market share and position based on FY08 ABI returns 31
 … while enhancing returns …

2005 – 2008 New Business • Commission bill maintained at c£550m as

Margin Improvement PVNBP grew by 27% by:
– Reducing individual pension, group
7.00% pension and bonds commissions
6.00% – Greater proportion of bond commission
5.00% fund-based versus initial commission for
IFAs
% PVNBP

4.00%

3.00% – Growth of fee-based Employee Benefit

Consultant business
2.00%

1.00%

0.00% • New business expenses reduced by £27m

2005 2006 2007 2008
despite volume growth by
Margin % Commission Paid % NB Expenses %
– Customer service efficiencies,
– e-Commerce and
– Improved mix

Significantly leveraging pricing, commission and expenses

32
 …and moving our mix towards higher margin risk products

2005 – 2008
Sales Growth
• Good growth in annuities through:
(33)% Ot her, 4% – Innovative pricing using rating factors and
(19)% Prot ect ion, 9%
– Compelling BPA proposition to 50 EBCs
Individual pensions,
+49% 18% • Protection down only 19% despite collapse in
mortgage market

+53%
Annuities, 21% – Excellent growth of Simplified Life product
• Individual Pension growth supported by market
+41% Corporat e & Group leading e-Commerce
Pensions, 21%
• Group and corporate pensions secured 18
schemes in Q4 2008, £788m PVNBP
+26% Bonds, 28% • Bonds impacted by market conditions and CGT
changes

PVNBP share1of 2008 portfolio

Driving profitability, driving value

Group life business moved from protection to GP in 2008 for comparative growth purposes
33
 Our focus on annuities is delivering benefits

New Business 2005 2008 +/-

Margin 5.2% 9.1% +3.9pps

IRR 9.5% 16.7% +7.2pps
Payback (years) 12 8 4 yrs
Capital strain £m 96 67 -30%

Capital strain % 6.1% 2.8% -3.3pps

• Extra rating factors (size/postcode/marital status & smoker status) delivering

underwriting profit
• Increase speed to market and flexibility of rating changes
• Established strong BPA proposition
• Reduced capital in market place drives increased returns

IRR benefits from improved pricing, lower expenses and capital efficiency
New business margin shown on an EEV basis. 34
 Our focus on protection is delivering benefits

New Business 2005 2008 +/-

Margin 9.2% 7.8% -1.4pps

IRR 16.5% 23.5% +7.0pps

Payback (years) 6 4 2 yrs

Capital strain £m 153 58 -62%

Capital strain % 12.5% 5.1% -7.4pps

• Highly competitive market with downward pressure on core mortgage and term products
• Improved re-insurance structures & reduced re-insurance costs
• Differentiated pricing by Channel / Distributor
• Implementation of enhanced rating factors
• IRR benefits from lower capital requirements from PS06/14

IRR benefits from improved pricing, lower expenses and capital efficiency
New business margin shown on an EEV basis. 35
 Key actions to improve margins in pensions

New Business 2005 2008 +/-

Margin 1.2% 1.6% +0.4pps

IRR 8.2% 12.4% +4.2pps
Payback (years) 12 9 3 yrs

Capital strain £m 148 146 -1%

Capital strain % 4.9% 3.2% -1.7pps

• Increased operational efficiency reducing new business costs

• Commission levels reduced in 2008 and 2009 to date. Key actions include:
– GPP 3% reduction in initial commission, 0.05% increase in FOC charge Q4 08
– IPP single premium commission reduced by 0.5% to 6.0% Q1 09
• Implementation of customer agreed remuneration

IRR benefits from improved pricing, lower expenses and capital efficiency
New business margin shown on an EEV basis. 36
 Key action in place to improve margins in bonds

New Business 2005 2008 +/-

Margin 0.8% 0.1% -0.7pps

IRR 9.7% 7.7% -2.0pps

Payback (years) 9 14 5 yrs

Capital strain £m 77 26 66%

Capital strain % 2.9% 0.8% 2.1pps

• Persistency assumptions strengthened

• IFA commission rates reduced by 1% Q4 08
• Allocation rate reductions by up to 2% Q1 09
• Guaranteed Fund Commission reduction Q2 09
• IPG profit impacted by market volatility and withdrawn from 17th April 2009

New business margin shown on an EEV basis.

37
Key action in place to improve margins in bonds

Bonds PVNBP 2005 - 2008

4,000

3,500

3,000

2,500
PVNBP

2,000

1,500

1,000

500

0
2005 2006 2007 2008

Unit Linked Unitised With Profits Offshore Other

• Unit linked bonds managed for value via commission and allocation changes
• With Profits will reduce as IPG withdrawn
• Offshore bond business under review

Continuing participation in this market dependent on favourable returns

38
 Generating superior returns through channel mix

Life & Pensions New Business

Channel and Margin Growth 2005-08
Increased focus on corporate channel

7
• BPA with pricing discipline

Retail
• Innovative GPP e-commerce
6
proposition
Corporate
Channel margin %

5
• Actively promoted by 30 out of 40
RBS JV
4 target accounts

B Soc 3 IFA
Excellent RBS JV growth
2
• 80% growth in Bancassurance
1
market share
0 • 50% increase in sales consultants
-50 0 50 100 150 200
Channel growth %

High growth in richer margin channels

Bubble size represents 2008 sales calculated on a PVNBP basis (EEV) 39
 Driving value from sizeable back-book

In-Force Operating Profits 2005-2008

£m
• Maturity of back book generating increased
800
ROEV 7.1% absolute returns
700

600
ROEV 4.9% • Reduced expense over-run through
500 operational initiatives, on target to eliminate
400
in 2009
300
• Improved focus on retention - keeping an
200
372 679
existing customer generates 3 times as
100 much value as attracting a new customer
0
2005 2005 2008 2008
Expected
Experience

Rigorous focus on eliminating experience variances

40
 With profit fund persistency

WP Persistency • 2005 and 2006 experience adversely impacted:

£m

30
– With profit pensions, bonds, low cost
endowment exits
20

10 – MVR removal in 2006 saw increase in level

of bond surrenders
0

-10 • Persistency profits made in the last 2 years

-20 • Likely to reverse following reattribution
-30 – 1% lapse results in £20m additional IFRS
2005 2006 2007 2008 profit

With profit persistency is better than our allowances

41
 Growing IFRS operating earnings

2005 2006 2007 2008 • 2nd & 3rd tranche of special

£m £m £m £m distribution will benefit 2009 &
2010
Underlying business profitability 382 435 556 627
One-off items:
• 64% higher underlying profit
• PS06/14 - 149 167 - driven by:
• Pension Scheme deficit funding by WP - 130 - - – £225m of expense saving
• Special distribution - - - 124 initiatives (£200m
• Other - (85) - - delivered)
Reported for the year 382 629 723 751 – Lower new business strain
– Higher annual
management charges and
WP bonus as markets rose

• Reattribution will further

enhance future earnings

Sustainable drivers of IFRS growth in plan

(1) Share of historic pension scheme deficit funding borne by shareholders charged to with-profit fund DAC write down following increases to lapse assumptions 42
 UK Life, Driving Value Through Excellence

• Strong and resilient capital position

UK Life
Market leadership • Self-financing capital model

• Well capitalised with-profit business

Drive up profitability
Purpose
Prosperity &
peace of mind Generate capital
Vision
One Aviva,
twice the
Operational excellence
value

Strategic
priorities
Targets Competitive advantage
• Manage composite • 98% meet or beat COR
portfolio • £500m cost savings by
• Build global Asset 2010
Management • Double IFRS EPS by
• Allocate capital 2012 at the latest
rigorously • 1.5 – 2 x dividend cover
• Increase customer on IFRS post tax
reach operating earnings
• Boost productivity

Aviva Investors
• Globally integrated business • Transform the investment model • Increase third party business

UK Europe N. America Asia Pacific

Market leadership Scale, growth, capital • Optimise business mix, Scale, growth
• Address legacy • Seize unique growth growth & margin • Prioritised portfolio
• Transform business opportunities • Generate net capital • Regional operating
model • Leverage scale returns model
• Exploit UK synergies • Generate capital • Contribute to doubling • Investment required
• Generate capital IFRS EPS by 2012

Generating capital
43
 Generating capital

2005 2008 +/-

New business capital strain1 £488m £293m -40%

Strain % of L&P sales (PVNBP)2 5.3% 2.5% -2.8pps

Free surplus generation £365m £704m +93%

£500m dividend paid over the last three years

Delivering value to group

1 New business strain includes initial capital strain and changes in required capital.2 Life & Pensions sales calculated on an EEV basis for comparative basis. 44
Actively managing the capital position

With Profit funds

• Dynamically hedging impact on cost of guarantees of equity market and interest rate risk
• Managing funds in line with their Principles and Practices of Financial Management
– Changing asset mix
– Reducing bonus rates

Non Profit funds

• Hedging market risk associated with AMCs
• Raising regulatory capital
• Tightening our underwriting criteria further on commercial mortgages

Maintaining and managing our credit risk exposure

Experts at managing capital risks

45
 UK Life, a strong capital position

Capital Position by Fund 31 December 2008

3,500

3,000

2,500

2,000
£m

1,500

1,000

500

CGNU CULAC NUL&P WP NUA NUL&P NP

Shareholder fund Long-term fund Required capital

Well capitalised and managed funds, in excess of required capital

Note: NUL&P shareholder fund included in NUL&P NP section 46
 UK Life driving up net worth

Net worth Surplus Generation

• £1.2bn increase in net worth over three years:
5,000

– Existing book surplus of £1.6bn

4,500

– Capital transactions releasing VIF of

4,000
£0.8bn
3,500
– One off benefits from PS06/14 of £0.3bn
3,000
– Exceptional market falls £0.3m
£m

2827
2,500

2,000
• This has allowed us to fund:
1,500
– New business strain of £0.7bn
1,000
– Dividends to group of £0.5bn
500
2005 Existing Capital One off New Dividends to Other 2008
book surplus transactions benefits business Group
strain

In tough financial markets, increasing capital strength while growing the business
47
 With-profit business well capitalised

Realistic Excess Capital in

With Profit Funds 2005-2008
(Pillar 1 Peak 2)
1,800

1,600

1,400 • With-profit funds all show significant

1,200
surpluses

1,000
£m

800
• No burn-through risk pre or post
reattribution
600

400

200

-
CGNU CULAC NUL&P

Strong capital position

48
Driving up profitability and generating capital

• Good market share, strong presence in growth areas

• Driving portfolio to more profitable product and channel mix, decisive

pricing and commission action

• Eliminating the expense over-run and extracting value from the back book

• Sustainable underlying earnings

• Strong capital position, self-financing business model delivering returns

• An inherited estate reattribution deal that creates capital opportunities

Driving value through financial and capital excellence

49
Agenda

• UK Life in excellent shape Mark Hodges, Chief Executive Officer

• Driving up profitability & generating capital John Lister, Finance Director

• Delivering operational excellence Toby Strauss, Chief Operating Officer

• Break and innovation demonstrations UK Life Management Team

• Strategic outlook Mark Hodges, Chief Executive Officer

• Strategic focus David Barral, Marketing Director

Questions & answers

Lunch

50
 UK Life, Driving Value Through Excellence

• Offshoring and outsourcing

UK Life
Market leadership • Simplification
• Service
Drive up profitability
Purpose
Prosperity &
peace of mind
Generate capital • RBS Joint Venture
Vision
One Aviva, Operational excellence
• Retention
twice the
value

Strategic
priorities
Targets Competitive advantage
• Manage composite • 98% meet or beat COR
portfolio
•

•
Build global Asset
Management
Allocate capital
•

•
£500m cost savings by
2010
Double IFRS EPS by
2012 at the latest
• Culture and leadership
rigorously • 1.5 – 2 x dividend cover
• Increase customer on IFRS post tax
reach operating earnings
• Boost productivity

Aviva Investors
• Globally integrated business • Transform the investment model • Increase third party business

UK Europe N. America Asia Pacific

Market leadership Scale, growth, capital • Optimise business mix, Scale, growth
• Address legacy • Seize unique growth growth & margin • Prioritised portfolio
• Transform business opportunities • Generate net capital • Regional operating
model • Leverage scale returns model
• Exploit UK synergies • Generate capital • Contribute to doubling • Investment required
• Generate capital IFRS EPS by 2012

Operational excellence
51
 The start of the journey

2005 A strategic opportunity to drive value

• Labour intensive organisation Offshoring and outsourcing

• High cost base

Simplification
• Complex inflexible IT & processes
Service
• Poor service levels
RBS Joint Venture
• Product complexity
Retention
• Minimal retention activity

• Lack of employee engagement Culture and leadership

52
Offshoring and outsourcing

Customer Operations Customer Operations

2005 2009

36%
Outsourced

98%
In-house

46%
In-house 18%
98%
In-house offshore

Increased flexibility and efficiency of operations

53
Simplification

2005 2009

Closed over 300

550 systems
systems
System decommissioning
20 core admin
4 admin systems
systems
‘Fix’ or migrate strategy
Mandatory Mandatory
change £9m change £4m
Site rationalisation
12,500 UK 9,200 UK
headcount headcount
eCommerce & self-serve
7 million policies
Limited eComm
on-line

Simplified operating environment

54
Site rationalisation

Life Customer Operations Life Customer Operations

2005 Footprint 2009 Footprint

Glasgow
Pune
Bangalore
Bangalore Chennai

Newcastle

Sheffield York
York
Sheffield
Norwich

Norwich
Stevenage
Bristol
Bristol

Southampton Eastleigh Eastleigh

Reduction in fixed costs; nine key sites to five

55
 Simplification

Scale Operations
In-force Policies per Headcount

1,600

1,400
Policies

Managing 44% more

1,200
1,485 policies per head in 2009
1,000 1,148
1,032 1,069

800
2006 2007 2008 2009

Driving efficiency into the business

56
 RBS Joint Venture

Long-term
Savings sales
(PVNBP £m)
1,800 • 119% sales growth
1,600
• 80% growth in Bancassurance
1,400
market share
1,200
1,000 • Promotion of Life, Pensions and
800 Investment products
600
400
• 50% increase in sales
200
consultants
0 • Well positioned to benefit from
2005 2006 2007 2008
RDR

Driving growth in strategic distribution channels

Life & Pensions sales (PVNBP) calculated on an EEV basis. 57
 Service

2005 Q1 2009
Service Promises
for all products
1 Financial 4 Financial
Advisor awards Advisor awards
£6m invested in our
Distributor satisfaction Communications Distributor satisfaction
41% 76%

61% reduction in
Customer satisfaction Customer satisfaction
complaints
38% 68%

Customers recommend us Listening to 56k customers Customers recommend us

57% & 17k distributors 77%

Distributors recommend us Distributors recommend us

85% distributor interactions
57% 86%
‘One & Done’

Operating model driving service improvements across the board

58
Retention

2005 2009

Transactional customer Specialist team of retention 30 experts retaining 11,000

service experts customers

3,000 customers without

No financial advice on
Trained financial advisors advisers receiving financial
existing products
advice

Retention training ‘in the 55,000 customers retained

No proactive retention
line’ this year within BAU

Active distributor 500 accounts engaged

Zero engagement
management over 100 closed

Focused strategy driving retention activity across the business

59
Culture and leadership

Leadership Capability
63% new Directors
Employee Engagement
CII accredited Service Academy
3,000 graduates
68%
49%

Talking Talent
7,900 employees

Bonuses aligned to IFRS profit

2005 2009

Brand Engagement
£2.6m investment in our people

Investment in leadership, capability and engagement

60
 Customer Driven Design

IPP New Business Processing

Reduction from an average of 39 days to 14 days
No. of customer days

Nov 08 Dec 08 Jan 09 Feb 09 Mar 09 Apr09

Removing waste, improving efficiency

61
 Customer Driven Design

GPP Valuations Processing

Reduction from an average of 52 days to 3 days
No. of customer days

Dec 08 Jan 09 Feb 09 Mar 09 Apr09

Removing waste, improving efficiency

62
Operational excellence: The journey does not stop here

Customer Portal

Adviser Portal

On-line Pensions

Significant investment in eCommerce

63
Operational excellence: The journey does not stop here

Customer Portal

Significant investment in eCommerce

64
Operational excellence: The journey does not stop here

Adviser Portal

Significant investment in eCommerce

65
Operational excellence: The journey does not stop here

On-line Pensions

Significant investment in eCommerce

66
 Expectations

• 55% outsourced or offshored

Operational • 2.7m policies migrated
Leverage • Flexible & efficient
• Continuing to reduce fixed costs

• 80% Protection NB on-line

• 90% Bonds NB on-line
eCommerce • Over 7 million policies on-line
• 70k customers using pensions tracker by 2010

• 68% Employee Engagement

• 86% Distributor Satisfaction
Brand and People • 77% Customer Satisfaction
• 5 Star Service

• £5m investment
Customer-driven • Redesign across all products
design • 85% distributor transactions One & Done
• 40% reduction in waste

The business is now engineered to deliver sustainable operational effectiveness

67
Agenda

• UK Life in excellent shape Mark Hodges, Chief Executive Officer

• Driving up profitability & generating capital John Lister, Finance Director

• Delivering operational excellence Toby Strauss, Chief Operating Officer

• Break and innovation demonstrations UK Life Management Team

• Strategic outlook Mark Hodges, Chief Executive Officer

• Strategic focus David Barral, Marketing Director

Questions & answers

Lunch

68
 Innovation Demonstrations

Unlocking Value from Customer Data On-line Pensions

Clive Bolton, Director of Annuity Business Pricing and Retention Brian Bussell, Director of Marketing, Pensions

Adviser Portal Customer Portal

Billy Burnside, Head of Distribution, E-business Chris Abrathat, Head of Marketing, E-commerce

69
UK Life, Driving value through excellence
Investor and Analyst Event, Wednesday 6th May 2009

Andrew Moss NUL18.11.08